High school
Finance & Accounting
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Q. 1. Damages for breach of Sale Of Good contracts Damages cover the following interests: Expectation Interest Compensation for this interest seeks to put the claimant in the position he would have been had the contract been performed. In a contract for the sale of goods, for example, a buyer who has paid for defective goods will be compensated with the difference in value between the price paid and market value of the good received (Peevyhouse v Garland Coal Co.


For most defective goods, that equals to the diminution in their value. But for some defective goods, the diminution in value is not equal to the cost of cure (Ruxley Electronics v Forsyth (1996)). In those instances, the courts would ascertain damages that are just and fair pertaining to the merits of the case. These are called ‘loss of amenity’ damages (see Ruxley). Where the breach is caused by non-delivery, the buyer may also sue for damages which would be calculated by the difference between the market value and the contracted value of the good (s. 51 SGA 1979). If, on the contrary, the buyer refuses to pay, the seller can claim for the loss of profits on the good (Charter v Sullivan [1957]). Reliance loss This seeks to put the claimant into the position as if he never entered into contract (McRae v Commonwealth Disposals [1950]). Often, the reliance interest is already covered by the expectation interest. Restitution Interest In this claim, the contract is set aside and the claimant seeks to obtain the price paid for goods that were not delivered (Whincup v Hughes [1871]). This claim may also be used to recover profits that the defendant made as a result of the breach (Attorney-General v. ...
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